On April 4, 2018, the notorious former CEO of the now defunct bitcoin exchange Mt Gox started an Ask-Me-Anything (AMA) post on the Reddit forum /r/bitcoin. Mark Karpeles (AKA Magical Tux) explained that he’s willing to answer questions concerning the controversial bankruptcy process that’s taking place in Japan within the Tokyo court system. Karpeles writes that he doesn’t want the remaining funds to be distributed to the Mt Gox company at all, but unfortunately due to bankruptcy laws in Japan, the exchange and its owners may end up with a large portion of the money.
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Mark Karpeles Wants Closure for Himself and Everyone Involved with the Mt Gox Fiasco
Mark Karpeles has to the bitcoin community to let them know that he isn’t pleased with the way the Mt Gox bankruptcy is going. Essentially Karpeles explains that the way the process works is the shareholders will get paid the amount agreed upon by the courts which is less than $500 per BTC, and Mt Gox could walk away with over a billion dollars. The former Mt Gox CEO details that he doesn’t want the money and he hopes this case can come to a close soon.
“The fact that today this is a possibility is an aberration and I believe it is my responsibility to make sure it doesn’t happen — One of the ways to do this would be civil rehabilitation, and as it seems most creditors agree with this, I am doing my best to help make it happen,” explains Karpeles during the evening hours in Japan.
I do not want to become instantly rich — I do not ask for forgiveness — I just want to see this end as soon as possible with everyone receiving their share of what they had on MtGox so everyone, myself included, can get some closure.
Karpeles Thinks That Maybe He Should Have Had Some Help Running Mt Gox
During the discussion, one commenter gets upset with Mark about who is selling thousands of BTC and BCH on the open market at the court’s discretion. Karpeles details that the trustee was appointed by the court and he has no control over that process. “I only wish to see bitcoins returned to all MtGox creditors as soon as possible,” the former exchange operator reveals. Moreover, Karpeles explains the industry was so nascent at the time of the hack, and he was a young “techie” that he maybe should have used business advisors while running the Mt Gox trading platform.
“When buying MtGox I should have had people around me to advise me and help with the management starting with the MtGox transfer contract — I’m a tech guy, and bitcoin was a tech thing at the time. In April 2011 there was an article in Forbes which changed bitcoin forever, and I found myself managing emergencies every day without any time to do the work that’d need to be actually done,” Karpeles explains in his AMA.
Mark Karpeles was once the CEO and lead programmer for the Mt Gox exchange before the business went bankrupt in 2014.
How Karpeles Found the Paper Wallet Containing 200,000 BTC
Then Karpeles details how he found the containing the 200,000 BTC that is now being sold for fiat and will be distributed among shareholders. In total 800,000 BTC was lost in the Mt Gox scandal and after the exchange went underwater, Karpeles found the cold storage wallet with the remaining coins.
“When MtGox filed for bankruptcy we evaluated the company as being bankrupt. Between its first trade in July 2010 and the bankruptcy in February 2014, MtGox accumulated a lot of history, including various attempts at implementing secure cold wallets back in 2011,” Karpeles emphasizes.
Despite being less secure that actual paper wallet, that cold wallet, a aes encrypted wallet.dat file, still contained almost 200,000 BTC. Upon discovery the BTC were moved to a safer environment and lawyers worked on how to announce this to the court. An announcement was made after those BTC were moved to a new paper-based cold wallet with approval of the court.
Unable to Control the Final Outcome
Throughout the conversation, it seems Mark Karpeles wants to do the community right, and most of all help the people who lost funds when fell apart. However, it doesn’t seem like he has any control over the court’s rulings and the trustee’s distribution process. For the first hour, Karpeles answered a variety of questions but has since left the post he created and has not responded to any questions since.
What do you think about Mark Karpeles’ random AMA post today? Let us know in the comments below.
Images via Pixabay, AP, and Wiki Commons
At bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.
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The cryptocurrency market has evolved greatly in recent years. However, it is still at an early stage in relation to other financial markets. While there are some derivative instruments in the cryptocurrency market, in the next stage of development more appropriate derivative instruments are needed.
A similar progression has taken place in other financial markets such as precious metals, hydrocarbons, metals, stocks, currencies, and so on. The cryptocurrency market is waiting for derivative instruments that are correctly implemented for its’ specificity.
At the heart of the problem is the high level of volatility that currently exists, as well as, other factors described in the . For those reasons, it is quite difficult to create a highly liquid and properly operating market for derivatives on bitcoin or any other cryptocurrency.
In order to hedge or simply speculate on rising or falling prices, option sellers are required. However, due to the specifics of the existing market (factors outlined in the above-mentioned article), at certain times there are no such sellers. Even if sellers do exist, they want very high premiums which makes buying those options impractical.
How did we solve the problem?
Our company developed a method in which participation of sellers is not required. We also developed a working model of this method in a form of a visual tool. We began with a model that’s used today in sports betting – called parimutuel betting.
In essence, all bets go into a pool and are then distributed amongst the winners, after the event in question takes place. However, such a method has limitations for use in the financial markets.
The amount of potential gain is unknown in advance. This is a problem because in order to hedge or sell short, a trader needs to know in advance what the amount that he or she will receive when the underlying asset hits a certain price in the future.
We created a method opposite to that of parimutuel betting and called it reverse parimutuel – a method in which an option premium is variable, but is always at the best possible price and is the same for all participants.
Because the price of the premium is known in advance, the gain relative to the price of the underlying asset can be calculated. The premiums for our options consist of the price of one or more of so-called price ranges, which are the building blocks of our options.
To solve the problem of determining a single premium for all participants for the same basic contract, we adopted an auction model. During the auction on the APO platform, all participants submit market or limit orders, just as they would in the familiar centralized exchanges.
At the end of the auction, the algorithm calculates prices for the ranges, and then calculates prices for all options that have bids.
This process is shown in a demo of the algorithm on our . The APO platform differs from standard centralized exchanges in that its’ operation does not require sellers to participate and payments from the collective pool are guaranteed to the winning bidders.
The platform can handle all kinds of different options – from classic calls and puts to sophisticated option constructs of any complexity.
The addition of a derivative cryptocurrency instrument with a guarantee of payment on expiration date benefits all participants. For example:
Miners can insure against the risk of depreciation in order to maintain profitability;
Individual traders can use options to speculate on falling, as well as rising, prices;
Companies conducting ICOs can protect the cryptocurrency value raised during the ICO so that;
it will not be diminished by price fluctuation when they need to convert it to fiat money.
By participating today in the creation of such a tool, you can be at the forefront of a fundamental change in the derivatives market, as well as in the cryptocurrency market.
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To estimate the true value of bitcoin is not a simple task. For doing that it is necessary to examine a lot of factors and aspects. One of the most comprehensive ways to estimate its value is to consider the value transferred over this network. Up-to-date evaluations reflect that bitcoin is showing good results as a currency.
bitcoin concept is known for nine years already. But the first several years of its existence were not very successful for it, as it attracted practically no attention. But as it is said, time works great changes. bitcoin is attracting more and more people and all of them will name very different reasons if asked why this cryptocurrency is interesting for them. Of course, for many of them bitcoin is an investment tool, but at the same time we should say that today the cryptocurrency can offer you much more other opportunities.
As it was investigated, more than $6 trillion has been transferred across the bitcoin network over the past several years. And it is quite an impressive amount taking into consideration the specificity of this sphere. These numbers show that bitcoin is rather actively used nowadays. However, we should understand that this amount also includes rewards for miners and funds transferred to exchanges.
There has now been over $6 trillion USD in value sent using , with just under $10 billion being sent daily.
Anyone doubting bitcoin's role as a medium of exchange is clearly not looking at the data.
— Josiah Hernandez (@chartingbitcoin)
Nevertheless, the daily transaction volume is also growing. Today it is around $10 billion. And this amount is clearly above all the expectations that bitcoin enthusiasts had nine years ago.
The number of bitcoin users is increasing. The last year was a period of enormous growth of global attention to the cryptocurrency market. But when new people come to explore bitcoin, some time is needed to see the value transferred over this network growing.
What is also important to be mentioned is that bitcoin represents itself the only one world’s cross-border currency. Neither trade agreements nor inter-fiat exchange rates impose any limitations or restrictions for it. Moreover, it is the only currency that is not regulated by governments right now despite some their trials. Nevertheless, there is still a lot to do to make it a global currency.
Thanks to technical developments, bitcoin is said to continue its way to success. In spite of the fact that the first quarter of the year was the worst period for bitcoin ever, Brian Kelly that according to the traditional seasonal cycle, the second quarter will be good for this cryptocurrency.
Among the factors that have negatively affected bitcoin price in the beginning of this year, experts name government regulation, measures taken by the major social media firms, and a lot of negative information about bitcoin and its price published by press.
Nevertheless, historically, bitcoin usually performs well in the second quarter. So, time will show how things will turn out.
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